Technical analysis – Market pre-open 11th February 2016
See previous comments. There were two brief probes above the 1870 poc on Wednesday which were rejected and ES subsequently sold off. Overnight ES has printed as low as 1802.50 which was a test below January’s low. Staying cautious here.
First Level Resistance = ES 1870 (previous maj poc)
Stocks>50dyma numbers: Nyse 23% (unch), Nasdaq 14% (unch), R2000 15% (unch). Numbers >50 are supportive.
Sentiment: My version of the Rydex Assets Ratio was slightly higher at 3.42. Thuesday’s ratio at 3.37 is as low as it has been for two years except for the sell-off late last year when the ratio fell to 3.00.
Supporting Charts:
Bonds IEF, the 7-10 yr ETF: Held the major Support at 105.00 following October’s decline and has rallied strongly to a new high on Wednesday. Futures indicate a higheropen today.
Dollar Index: A probe in early December above the March high was rejected and this week the chart printed its lowest level since then. There is Support at 95.22, the 12mn poc.
Gold: GLD has rallied strongly benefiting from the risk-off tone and weaker dollar and this week has printed its highest level since June which approached First Level LT Resistance at 115.12 (24mn poc).
Oil: this week broke back below the 1/2R off the January low which put the chart back in a weak price location. Has sold off hard since then and today prints very close to that low.
EURUSD: currently printing above the Major 1/2R Resistance at 1.1241. in a stronger price location.
